Solar Energy Inc. issued a $915,000, 7.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar's year-end is December 31. Period Ending Cash Interest Paid Period Interest Expense Discount Amort Unamortized Carrying Discount Value Oct. 1/23 $36,533 $878,467 Oct. 1/24 Oct. 1/25 $ 64,050 64,050 $ 70,277 $ 6,227 30,306 884,694 78,776 6,726 23,580 891,420 Oct. 1/26 64,050 71,314 17.264 16,316 898,684 Oct. 1/27 64,058 71,895 7,845 8,472 Oct. 1/28 64,050 72,522 8,471 996, 529 915,000 $320,250 $356,784 $36,533 Assume that interest has already been paid on October 1, 2026. Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2026, for cash of: a. $888,500 b. $898,684 c. $901,900 View transaction list Journal entry worksheet 1 2 3 Record the retirement of bond for $888,500. Note: Enter debits before credits. Date Oct. 1 2026 General Journal Debit Credit Record entry Clear entry View general journal

Solar Energy Inc. issued a $915,000, 7.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar's year-end is December 31. Period Ending Cash Interest Paid Period Interest Expense Discount Amort Unamortized Carrying Discount Value Oct. 1/23 $36,533 $878,467 Oct. 1/24 Oct. 1/25 $ 64,050 64,050 $ 70,277 $ 6,227 30,306 884,694 78,776 6,726 23,580 891,420 Oct. 1/26 64,050 71,314 17.264 16,316 898,684 Oct. 1/27 64,058 71,895 7,845 8,472 Oct. 1/28 64,050 72,522 8,471 996, 529 915,000 $320,250 $356,784 $36,533 Assume that interest has already been paid on October 1, 2026. Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2026, for cash of: a. $888,500 b. $898,684 c. $901,900 View transaction list Journal entry worksheet 1 2 3 Record the retirement of bond for $888,500. Note: Enter debits before credits. Date Oct. 1 2026 General Journal Debit Credit Record entry Clear entry View general journal

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization
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